Emaar Malls Raising $750 Million From Debut Islamic Bonds

Emaar Malls Group LLC, the Dubai-based owner of the one of the world’s biggest shopping centers, is raising $750 million from a debut sale of Islamic bonds, according to two people familiar with the matter.

The 10-year notes will be priced to yield 182.5 basis points, or 1.825 percentage points, above the benchmark midswap rate, the people said, asking not to be identified because the information isn’t public. The price was cut from an original guidance of about 200 basis points above midswaps after bids of more than $5 billion were received, according to the people.

“Everyone is loving Emaar’s paper,” Ahmed Shehada, head of advisory at National Bank of Abu Dhabi Securities LLC, said by phone. “It’s attractively priced, the market is positive and that gave them the mandate to be more aggressive with pricing.”

Emaar Malls, owned by Emaar Properties PJSC (EMAAR), the developer of the world’s tallest skyscraper in Dubai, has the second-lowest investment grade rating from Moody’s Investors Service. The rating reflects the company’s stable recurring cash flows and is underpinned by the success of the Dubai Mall, a popular tourist attraction, Moody’s said in a note on June 2.

Dubai Mall, which features everything from an underwater zoo to the world’s most expensive gold-sheeted cupcakes, is helping a retail and tourism boom less than five years after the emirate almost defaulted on debt. Profit at Emaar Malls rose 56 percent in the first quarter from a year earlier to 329 million dirhams ($89.6 million), according to its sukuk prospectus.

Emaar, controlled by the Dubai government, plans to raise as much as $2.45 billion from an initial public offering of the retail unit later this year. The company said earlier this month it borrowed $1.5 billion through an Islamic facility priced at 1.75 percent over the London interbank offered rate.

Abu Dhabi Islamic Bank PJSC, Al-Hilal Bank, Dubai Islamic Bank PJSC, Emirates NBD Capital Ltd., First Gulf Bank PJSC, Mashreqbank PSC, Morgan Stanley, National Bank of Abu Dhabi PJSC, Noor Bank, Union National Bank PJSC and Standard Chartered Plc helped arrange the deal, the people said.

To contact the reporters on this story: Samuel Potter in Dubai at spotter33@bloomberg.net; Arif Sharif in Dubai at asharif2@bloomberg.net

To contact the editors responsible for this story: Claudia Maedler at cmaedler@bloomberg.net Dana El Baltaji, Samuel Potter

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